Silver Price Today

Silver Price Guide

WHAT MAKES SILVER A PRECIOUS METAL?

This is a classification of specific metals that are considered rare and have a higher economic value compared to other metals. There are five main precious metals openly traded on various exchanges, Silver is the second largest market in this specific sector. Silver is sometimes referred to as monetary metals as it has historical uses as currencies and is seen as a store of value; however, silver has a significant industrial component, equivalent to almost half of its markets, because it is less reactive, good conductors and highly malleable.

WHAT IS SPOT SILVER?

The spot silver price refers to the price of silver for immediate delivery. Transactions for bullion coins are almost always priced using the spot price as a basis. The spot silver market is trading very close to 24 hours a day as there is almost always a location somewhere in the world that is actively taking orders for silver transactions. New York, London, Sydney, Hong Kong, Tokyo, and Zurich are where most of the trading activity takes place. Whenever bullion dealers in any of these cities are active, we indicate this on our website with the message “Spot Market is Open”. For the high and low values, we are showing the lowest bid and the highest ask of the day.

SILVER PRICE - FUTURES MARKET

The silver futures market is one of a number of commodity futures, wherein contracts are entered into, agreeing to buy or sell gold at a certain price at a specified future date. Silver futures are used both as a way for silver producers and market makers to hedge their products against fluctuations in the market, and as a way for speculators to make money off of those same movements in the market.

A precious metals futures contract is a legally binding agreement for delivery of a metal in the future at an agreed-upon price. The contracts are standardized by a futures exchange as to quantity, quality, time and place of delivery. Only the price is variable.

Hedgers use these contracts as a way to manage their price risk on an expected purchase or sale of the physical metal. They also provide speculators with an opportunity to participate in the markets by lodging exchange required margin.

There are two different positions that can be taken: A long (buy) position is an obligation to accept delivery of the physical metal, while a short (sell) position is the obligation to make delivery. Silver contracts are rarely settled in physical metal. The great majority of futures contracts are offset prior to the delivery date. For example, this occurs when an investor with a long position sells that position prior to delivery notice.

SPOT SILVER PRICE VS SILVER FUTURES PRICE

There is usually a difference between the spot price of silver and the future price. The future price, which we also display on this page, is used for futures contracts and represents the price to be paid on the date of a delivery of gold in the future. In normal markets, the futures price for gold is higher than the spot. The difference is determined by the number of days to the delivery contract date, prevailing interest rates, and the strength of the market demand for immediate physical delivery. The difference between the spot price and the future price, when expressed as an annual percentage rate is known as the “forward rate”.

CHANGE (CHANGE IN SILVER PRICE FROM PREVIOUS CLOSE)

This is the change in the price of the metal from the previous close, which is not necessarily the previous day. Weekdays from 6:00 PM NY time until midnight the previous close is from the current day. Here’s why: The time the silver market stops trading in New York on weekdays is for a 60 min period, from 5:00 PM New York time until 6:00 PM. Kitco use the last quote at 5:00 PM as the close of that given day. Change is always the difference between the current price and the price at 5:00pm. For example: Silver last traded at $17.00 at 5:00 PM on January 17. If it is January 17 at 6:30 PM and the price is $17.02, we will show a change of +0.02. If it is January 18 at 5:00 PM and gold is quoted at $17.50 then we would show a change of +0.50 at that time.

SILVER FUTURES CHANGE (CHANGE FROM PREVIOUS CLOSE)

This is the change in the price of the metal from the price at the end of the previous trading session. Currently, the weekday closing time is 2:00 PM Eastern Time.

30 DAY CHG (30-DAY CHANGE)

This is the change in the price of the metal from 30 days ago as opposed from the previous close.

1 YEAR CHG (1-YEAR CHANGE)

This is the change in the price of the metal from a year ago today, as opposed from the previous close.

HOW IS THE LIVE SPOT SILVER PRICE CALCULATED?

Every precious metals market has a corresponding benchmark price that is set on a daily basis. These benchmarks are used mostly for commercial contracts and producer agreements. These benchmarks are calculated partly from trading activity in the spot market.

The spot price is determined from trading activity on Over-The-Counter (OTC) decentralized markets. An OTC is not a formal exchange and prices are negotiated directly between participants with most of the transaction taking place electronically. Although these aren’t regulated, financial institutions play an important role, acting as market makers, providing a bid and ask price in the spot market.

I'VE HEARD THAT SILVER TRADED 24/7 – IS THAT TRUE? IS THERE AN OPEN AND A CLOSE?

Silver, actually trades 23 hours a day Sunday through Friday. Most OTC markets overlap each other; there is a one-hour period between 5 p.m. and 6 p.m. eastern time where no market is actively trading. However, despite this one hour close, because spot is traded on OTC markets, there are no official opening or closing prices.

For larger transactions, most precious metals traders will use a benchmark price that is taken at specific periods during the trading day.

WHAT IS THE BID PRICE FOR SILVER?

The bid price is the highest price someone is willing to pay for an ounce of gold.

WHAT IS THE ASK PRICE FOR SILVER?

The ask price is the lowest price someone is willing to sell an ounce of gold.

WHAT DOES THE SPREAD MEAN FOR THE SILVER PRICE PER OUNCE TODAY?

The spread is the price difference between the bid and the ask price. Silver is a fairly liquid markets so traders can expect to see a fairly narrow spread in these markets; however, other precious metals may have wider spreads, reflecting a more illiquid marketplace.

IS THERE A SILVER BENCHMARK

Because there is no official closing or opening price for gold or silver, market participants rely on benchmark prices, set during different times of the day by different organizations. These benchmarks are also referred to as fixings.

The London Bullion Market Association (LBMA) is the leading organization that is responsible for maintaining benchmarks for all precious metals. The LBMA Silver Price, The LBMA Gold Price, and the LBMA PGM Price are the widely accepted benchmarks in the precious metals space. Kitco.com also provides a variety of benchmark prices for gold and silver.

The silver benchmark price is determined daily in an electronic auction between participating banks with the LBMA, which is administered by ICE Benchmark Administration.

SILVER FIXES

Like the previous gold fix, the London Silver Fix was a global benchmark used for over 100 years but was revamped in August 2014. The widely used LBMA Silver Price auction is operated by CME and administered by Thomson Reuters. The price is set daily in U.S. dollars at 12:00pm London time and has changed the process from being a physical to an electronic auction.

There are six participating banks in the LBMA Silver Price, which are the China Construction Bank, HSBC Bank USA NA, JPMorgan Chase Bank, Mitsui & Co Precious Metals Inc., The Bank of Nova Scotia - ScotiaMocatta, The Toronto Dominion Bank and UBS AG.

THE KITCO SILVER FIX

The Kitco.com 10 AM Silver Fix consists of four fixing prices each day: the 10 AM New York Silver Fix, the 10 AM UK Silver Fix, the 10 AM Mumbai Silver Fix and the 10 AM Hong Kong Silver Fix. These time zones have been selected because they represent the world's largest precious metals trading centers.

The 10 AM Silver Fix is determined by a unique Kitco algorithm that calculates the average spot price between bid/offer on the wholesale silver market, as quoted by internationally recognized bullion dealers. The Kitco Silver Fix can be found at: http://www.kitco.com/fix/

ARE THE SILVER PRICES PER OUNCE THE SAME AROUND THE GLOBE?

One troy ounce of silver is the same around the world and for larger transaction are usually priced in U.S. dollars as that is the most active market; however, the value of an ounce of silver can be higher or lower based on the value of a nation’s currency. Traditionally, currencies that are stronger than the U.S. dollar have a lower value silver price where currencies that are lower than the U.S. dollar have a higher prices. While silver mostly quoted in ounces per U.S. dollar, OTC markets in other countries also offer other weight options.

WHAT IS OZ, GRAM, KILO, TOLA, (ETC.)

Silver and most precious metals prices are quoted in troy ounces; however, countries that have adopted the metric system price gold in grams, kilograms and tonnes.

Grams = 0.032151 troy ounces

Kg = 32.150747 troy ounces

Tonnes = 32,150,7466 troy ounces

Tael = 1.203370 troy ounces

Tola = 0.374878 troy ounce

Though not as popular as kilograms and grams, Tael is a weight measurement in China. The tola is a weight measurement in South Asia.

WHAT IS THE DIFFERENCE BETWEEN AN OUNCE AND A TROY OUNCE WHEN LOOKING AT A SILVER CHART?

A troy ounce is used specifically in the weighing and pricing of precious metals and its use dates back to the Roman Empire when currencies were valued in weight. The process was carried over to the British Empire where one pound sterling was worth one troy pound of silver. The U.S. Mint adopted the troy ounce system in 1828.

A troy ounce is slightly heavier than an imperial ounce by about 10%. An imperial ounce equals 28.35 grams, while a troy ounce is equal to 31.1 grams.

WHY IS SILVER MOSTLY QUOTED IN U.S. DOLLARS

While you can buy silver in any currency in the world, it is important to realize that ultimately everything is based on the value of the U.S. dollar. Given that the U.S. is the world’s biggest economy and one of the most stable, the dollar has become a reserve currency, meaning that it is held in significant quantities by other governments and major institutions. Reserve currencies are used to settle international transactions. Since the start of the 20th century, the U.S. dollar has been the dominant reserve currency around the world.

WHY ARE SILVER AND GOLD PRICES SO DIFFERENT?

The reason gold and silver prices vary widely boils down to one simple fact: rarity. The less supply there is of a metal, the higher the price. Therefore, gold prices tend to be much higher than silver prices because it is much harder to get. The reason supply is much larger for silver is because it is an easier metal to mine and it is often mined as a by-product to other metals mining. The average occurrence of gold in igneous rock is 0.004 parts per million. Silver shows up at a rate of 0.07 parts per million.

WHAT IS THE PRICE OF THE GOLD AND SILVER RATIO?

The gold-to-silver ratio shows you how many ounces of silver it would take to buy an ounce of gold. If the ratio is at 60 to 1, this means it would take 60 ounces of silver to buy one ounce of gold.

Investors use the ratio to determine whether one of the metals is under or overvalued and thus if it is a good time to buy or sell a particular metal.

When the ratio is high, it is widely thought that silver is the favored metal. When the ratio is low, the opposite is true and usually signals it is a good time to buy gold.

SILVER MINING

Silver mining refers to the process of mining silver from the ground. Silver is commonly extracted from ore by smelting or chemical leaching. The main sources of silver are copper, copper-nickel, gold, lead and lead-zinc ores mined in Canada, Mexico, Poland, Peru, Bolivia, Australia and the US. According to the Silver Institute, global silver mine production growth slowed to 2% in 2015, reaching a record 886.7 million ounces, while primary silver mine production grew 5% and accounted for 30% of global silver mine supply. The overall slowdown in mine production last year is expected to continue.

WHAT IS THE LBMA?

Based in London, the London Bullion Market Association (LBMA) is an international trade association, which represents the precious metals markets including gold, silver, platinum and palladium. It is not an exchange. Its current members include 140 companies made up of refiners, fabricator, traders, etc. The LBMA is responsible for setting the benchmark prices for gold and silver as well as for the PGMs. For the refining industry, the LBMA is also responsible for publishing the Good Delivery List, which is widely recognized as the benchmark standard for the quality of gold and silver bars around the world.

WHAT IS SLV?

iShares Silver Trust – widely known as SLV – is the world’s largest silver-backed exchange-traded fund. Managed by BlackRock, it is valued at over $5.9 billion as of May 26, with more than 10 tonnes of silver held in trust. The ETF was first launched in April 2006.

DO INTEREST RATES MOVE THE PRICE OF SILVER?

While silver is considered a monetary metal, because of its large industrial component, the metal doesn’t have a significant direct correlation to interest rates. However, silver is highly correlated to gold, which is also correlated to interest rates so there is an indirect impact on silver. In simplest terms, interest rates represent the cost of borrowing money. The lower the interest rate, the cheaper it is to borrow money in that country’s currency. Rates have an impact on economic growth. Interest rates are a vital tool for central bankers in monetary policy decisions. A central bank can lower interest rates in order to stimulate the economy by allowing more people to borrow money and thus increase investment and consumption. Low interest rates weaken a nation’s currency and push down bond yields, both are positive factors for silver and gold prices.

WHAT IS QUANTITATIVE EASING?

Quantitative easing is a monetary policy tool used by central bankers in response to the 2008 financial crisis. The tool was first used in Japan but became a widely used term – punned QE – after former Federal Reserve chair Ben Bernanke introduced the concept in the U.S. in response to the fall of major investment bank Lehman Brothers. Bernanke purchased bad debt off other major commercial banks in order to prevent them from defaulting, while simultaneously increasing the money supply. Since then, other central banks have implemented this tool including the European Central Bank and the Bank of Japan.

QE has risks including increasing inflation if too much money is created to purchase assets, or can fail if the money provided by central bankers to commercial banks doesn’t trickle down to businesses or the average consumer.

WHAT IS A SAFE-HAVE ASSET

Since ancient Egypt, silver and gold have been used as a currency and of as a store of wealth. Historically, despite its volatility, precious metals traditionally performs well during periods of financial turbulence or economic weakness. To help stabilize an economy, a central bank will loosen its monetary policy or the government will introduce fiscal initiative, these measures can impact a nation’s currency and ultimately increase domestic physical precious metals demand. Investors buy gold and silver when they lose confidence in their currency.

SILVER’S INDUSTRIAL USE

While silver is sometimes associated with gold as a monetary metal, it has a significant industrial component. Half of silver’s physical demand comes from its industrial market. The biggest portion of industrial demand comes from the solar power sector as silver is a significant component in photovoltaic cells.

WHAT ARE THE MOST POPULAR SILVER COINS

Every major mint produces their own silver bullion coins and are extremely popular for investors who want to hold physical metal. While only government mints can produce silver dollars, there are a variety of private mints that produce similar products referred to as silver rounds. Here are a list of the most popular silver coins available.

• American Eagle one-ounce coin
• Canadian Maple Leaf
• Vienna Philharmonic Silver Coins
• British Silver Britannia Coin
• Australian Silver Kangaroo